McDonalds 2003 Annual Report Download - page 4

All of our activities are being driven by our cus-
tomers, because we know the customer is our boss.
Significantly, we promised that we would
improve returns to shareholders...and we delivered
across the board.
Cash from operations reached a record $3.3 bil-
lion in 2003. We used this cash flow to fund capital
expenditures, pay down $900 million of debt and
return nearly $1 billion to shareholders. We raised our
annual dividend by the largest amount in history—
70 percent—to $500 million. We also repurchased
$440 million of our stock.
Reflecting this improved financial discipline
and performance, McDonald’s stock price increased
more than 90 percent since my letter to you in last
year’s annual report.
A stronger foundation in 2004
Despite last year’s impressive results, we have con-
siderably more to do. Revitalization is not a quick fix
for McDonald’s. It is a long-term plan to generate
predictable growth in sales and profits.
We will continue to take the necessary steps this
year to revitalize our business and strengthen our
foundation. This will put us in a position to deliver
sustainable growth.
Our entire System is aligned with our plan to do
just that—McDonald’s Plan to Win.
This Plan contains aggressive goals and measures
for success based on the critical drivers of our cus-
tomers’ experiences—people, products, price, place
and promotion. McDonald’s performance is not driven
by one product or one initiative. Our long-term success
will result from executing and innovating in each of
our business drivers.
To strengthen restaurant operations in 2004, we
are marshalling our resources to make a significant,
positive impact on the speed, accuracy and friendli-
ness of our service. This includes providing our
people with more hospitality training and rigorously
measuring our operational performance.
We will also enhance our overall customer expe-
rience by continuing to reinvest in existing restaurants.
Enhancing food taste, adding variety and extend-
ing value menus to more markets will remain priori-
ties as well.
We also appreciate our customers’ desire for safe
products that fit within their lifestyles. So we will
continue to play a leadership role in assuring the
safety and quality of our food. Additionally, we are
responding to lifestyle issues with an initiative that
focuses on three important areas: menu choice, physi-
cal activity and education.
Taken together, we’re confident our Plan priorities
will enable us to continue our momentum in markets
that are doing well, and rebuild in those that have
struggled recently. Notably, we will aggressively pur-
sue growth opportunities in markets with great long-
term potential. China, with 1.3 billion people and a
growing economy, is a perfect example.
We are committed to keeping our entire System
focused on the execution of one plan, our Plan to
Win, and communicating one global brand message
to our customers: “i’m lovin’ it.”
Corporate governance
You can be assured that McDonald’s will adhere to
our long-standing principles of honesty and integrity
in every aspect of our business.
Earlier this year, we were gratified when
GovernanceMetrics International, which rates the cor-
porate governance practices of some 2,100 companies
around the world, recognized our performance by
awarding McDonald’s Corporation a perfect 10, one
of only 22 organizations to achieve this standard.
Moreover, 2003 represented the second year in a row
McDonald’s received the highest rating possible,
placing us in an even more select group of trustworthy
companies.
McDonald’s 2003 page 2
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